UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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(Exact name of registrant as specified in its charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Name of Each Exchange On Which Registered |
| N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act:
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| Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. |
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| Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act |
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| Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days. |
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| Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). | |||
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| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. | |||
| Large accelerated filer | ☐ | Accelerated filer ☐ | |
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☒ | Smaller reporting company |
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| Emerging growth company |
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| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). |
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The value of Common Stock held by non-affiliates of the Registrant on November 30, 2022 was $
Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
The Company is filing this Amendment No. 1 to Form 10-K/A (the “Form 10-K/A”) for the year ended May 31, 2023, originally filed with the Securities & Exchange Commission on September 25, 2023. This Form 10-K/A has been amended as follows:
- A property map has been added for the Cache River Property pursuant to Item 1303(b)(1) of Regulation S-K.
- Summary property disclosure on the Cache River Property has been added pursuant to Item 1303(b)(2) of Regulation S-K.
- Internal controls disclosure has been added for the Frog Property and Cache River Property pursuant to Item 1305 of Regulation S-K.
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TABLE OF CONTENTS
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PART I
Item 1. Business
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars and all references to "common shares" refer to the common shares in our capital stock.
As used in this annual report, the terms "we", "us", "our company", "Wolverine", mean Wolverine Resources Corp., a Nevada corporation, unless otherwise indicated.
Corporate History
Our company was incorporated in the State of Nevada on February 23, 2006 and is quoted on the OTC Pink under the symbol WOLV.
Since we began operations in 2006, the Company has been focused primarily on the exploration for and development of base and precious metal properties located in North America. The Company has two mineral properties located in Labrador, Canada, the Frog Property and the Cache River Property.
On February 28, 2022, the Company entered into an agreement ("Agreement") with 86835 Newfoundland & Labrador Corp. ("86835"), a non-arm's length party, to acquire a 40% interest in the Frog Property (the "Property") located in Labrador, Canada. Under the terms of the Agreement the Company issued 28,500,000 common shares at a deemed price of $0.04 per share for a purchase price of $1,140,000. The deemed issue price of the acquisition was determined based on an equivalent price per share for a concurrent financing. For accounting purposes, the acquisition had a fair value $2,850,000 and a fair value of $0.10 per share based upon the closing market price of Wolverine on February 28, 2022.
86835 is an Innu owned and operated private mineral exploration company which owns mineral properties in both Newfoundland and Labrador. Bruce Costerd and Luke Rich are officers, directors and shareholders of 86835 and Wolverine.
On August 9, 2022, Wolverine entered into an Amended Purchase Agreement with 86835 Newfoundland & Labrador Corp. ("86835") relating to the acquisition of a 40% interest in the Frog Property located in Labrador, Canada. Under the terms of the Amended Purchase Agreement the number of shares issued pursuant to the acquisition was reduced from 28,500,000 common shares to 27,500,000 common shares and the number of claims was reduced from 315 claims to 262 claims.
On July 19, 2023, Wolverine entered into a Second Amendment of the Purchase Agreement with Rich Resources Inc.("Rich") formerly 86835 Newfoundland & Labrador Corp. relating to the acquisition of a 40% interest in the Frog Property located in Labrador, Canada. Under the terms of the Second Amendment of the Purchase Agreement 24,000,000 common shares of Wolverine were issued to Rich at a deemed price of $0.04 per share and 12,000,000 Wolverine common shares held by each of Bruce Costerd and Luke Rich were cancelled.
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The Company also holds a 90% interest in the Cache River Property located in Labrador, Canada consisting of a total of 53 mineral claims and an area of 1320 hectares (3,262 acres). The Company is not currently conducting any exploration on the Cache River Property.
We have not yet determined whether the Frog Property or the Cache River Property contain mineral reserves that are economically recoverable.
Our Current Business
We are an exploration stage mining company engaged in the identification, acquisition, and exploration of metals and minerals with a focus on base and precious metals. Our current operational focus is to raise sufficient funds to continue exploration activities on our properties in Labrador, Canada, known as the Frog Property and the Cache River Property. We intend to conduct further exploration activities on the properties in 2023. We expect to review other potential exploration projects from time to time as they are presented to us.
Our business is conducted by independent contractors all of which are officers and/or directors of the Company. As of May 31, 2023, the company had one full-time consultant, Bruce Costerd, the CEO and a director of the Company. The Company also has two consultants engaged on a non-exclusive, part time basis, Richard Haderer, the CFO and a director of the Company and Luke Rich, a director of the Company. Our business plan does not anticipate that we will hire a large number of employees or that we will require extensive office space. We have to date, and plan to continue to acquire most of the industry and geological expertise we require through third party contractual relationships with other companies, which will act as operators of our various interests. Although this exposes us to certain risks on behalf of those operators, it also allows us to participate in the often, unique experience and knowledge that local persons have related to certain properties.
The Company's objective for the next twelve months on the Frog Property is that additional magnetics be completed expanding on the current grid to the north and south of anomalous readings encountered in 2022. This will be completed in fall 2023, at which time prospecting should be completed expanding the 2021 range of coverage focusing on the large magnetic anomaly in the area as it extends beyond the valley bottom to the steep valley ridges where it is more likely to encounter outcroppings.
We have suffered recurring losses from operations and anticipate generating losses for the foreseeable future. The continuation of our business is dependent upon obtaining further financing, completing a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Mineral Properties
Summary
Since we began operations in 2006, the Company has been focused primarily on the exploration for and development of base and precious metal properties located in North America. The Company has two mineral properties located in Labrador, Canada, the Frog Property and the Cache River Property. Currently only the Frog Property is material to the Company. The Frog Property and the Cache River Property is at the exploration stage and there are no mineral resources or mineral reserves. Wolverine is the operator of the Frog Property and the Cache River Property.
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Frog Property -Labrador, Canada
Property Description and Location
Figure 1: Location Map
The Frog Property is located approximately 70 kilometres west-northwest of the town of Natuashish and 65 kilometres southwest of the town of Nain, Labrador, situated 30 kilometres south of the Voisey's Bay nickel, copper, and cobalt deposit operated by Voisey's Bay Nickel Company Ltd., a subsidiary of Vale S.A (Figure 1). The Property is centered on latitude 56.02° N and longitude 62.24° W within the 1:50000 scaled National Topographic System ("NTS") map sheets 13M16 and 14D01.
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Figure 2: Frog Property Mineral Licence Map and Topography
The Property is 60% owned by 86835 Newfoundland & Labrador Corp ("86835") of Natuashish, NL, an Innu owned private corporation and 40% owned by Wolverine. The Property currently consists of 5 contiguous mineral licences composed of 262 claims encompassing 6,550 ha (16,185 acres) (Figure 2). A complete listing of mineral licences comprising the Frog Property follows on Table 1.
| Licence | Area (ha) | Area(acres) | # Claims | Issued | Expiry | Mapsheets |
| 031778M | 2,875 | 7,104 | 115 | 2020-12-23 | 2025-12-23 | 13M16,14D01 |
| 031779M | 2,500 | 6,178 | 100 | 2020-12-23 | 2025-12-23 | 13M16,14D01 |
| 034256M | 150 | 371 | 6 | 2022-04-13 | 2027-04-13 | 13M16 |
| 034255M | 450 | 1,112 | 18 | 2022-04-13 | 2027-04-13 | 14D01 |
| 034465M | 575 | 1421 | 23 | 2022-05-07 | 2023-05-07 | 14D01 |
Table 1: List of Mineral Licences
Exploration Permits
Exploration Permit E230188 and E230214 were granted by the Government of Newfoundland and Labrador for exploration on the Frog Property until June 27, 2025. All exploration in Labrador requires approval from the Innu Nation as part of the permitting process.
Mineralization
To date, no economic mineralization has been discovered on the Property. A total of 23 rock (float) samples were collected and sent to Eastern Analytical Ltd. of Springdale, Newfoundland for multi-element analyses including nickel and copper sulphides as well as rare earth element minerals. Although no economic results for precious metals were found from the laboratory analyses, one sample did contain up to 780 ppm Cu. Elevated iron and depleted sulphur suggests iron (+/-) titanium oxides present likely related to the coincident magnetic high.
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It was noted that all of the samples analyzed contained high levels of zirconium averaging 562 ppm Zr (2.7 times normal background levels) and the samples were subsequently analyzed for rare earth elements (REE's). Of the 23 samples, 13 were found to contain total rare earth elements (TREE) grading above twice normal background values averaging 475 ppm TREE + Y.
Preliminary petrographic work on one sample suggests the rock is an iron rich olivine ("fayalite") granite demonstrating textures consistent with chemical disequilibrium and possible hydrothermal alteration. Fayalite granites are unusual rocks commonly associated with anorthosite-magnerite-charnokite-granite (AMCG)-type massifs such as the Nain Igneous Complex.
Internal Controls Disclosure
The Company has only conducted preliminary exploration work on the Frog Property. The Company will establish internal control procedures once active exploration activities on the Frog Property commence.
Exploration History
In the fall of 2021, 86835 completed an initial exploration program on the Property consisting of prospecting, rock geochemistry, and ground magnetics.
In February and March of 2022, the Company completed a ground magnetometer survey on the Property. A total of
28.5 line-km of surveying was completed on 30 - 100 m spaced lines encompassing an area of 350 ha. The survey was completed by indigenous workers employed by 86835 using an Overhauser GEM GSM-19 Magnetometer. The survey expanded on a preliminary survey completed late in 2021.
Although several small anomalous bodies were delineated in the eastern portion of the grid, a strongly magnetic body was outlined extending 1.4 km through the western portion of the grid and is open to the north and south. This magnetic feature is 180 to 360 m wide and shows a sharp contrast of up to 20,000 nT between the anomaly and country rock.
In the fall of 2022 an exploration program was completed which consisted of prospecting in an area of strong magnetics delineated by a ground magnetics survey completed earlier in the year.
Recommendations
In the author's opinion, the Frog Property is a property of merit and additional exploration should target both the source of the magnetic anomaly and the areas suspected to contain rare earth mineralization.
It is recommended that airborne magnetics and radiometrics surveys be completed over the Property. Rare earth mineralization is generally associated with uranium mineralization and radiometrics should define promising areas for follow-up examination.
The area of the strong magnetic anomaly is completely covered in glacial tills and no outcrop is evident. Prospecting should be completed expanding the 2021 range of coverage focusing on the north and south limits of the large magnetic anomaly at the cliff edges where the steep valley ridges demonstrate spalling of rocks into scree piles. Additional prospecting should be completed following the airborne geophysical surveys as well, focusing on both radiometric and magnetic anomalies.
It is estimated that the next phase of exploration would cost $152,000, as itemized in Table 4.
| Program | Description | Cost | ||
| Airborne Geophysics | Property wide | $ | 75,000 | |
| Prospecting | 7 people x 14 days | $ | 24,500 | |
| Mob/demob | Helicopter/Float Plane | $ | 25,000 | |
| Analytical | 100 samples | $ | 5,000 | |
| Camp | $ | 9,000 | ||
| Contingencies | ~ 10% | $ | 13,500 | |
| Total | $ | 152,000 | ||
| Table 4: Recommended | Budget - Frog Property |
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Cache River Property –Labrador, Canada
Property Description and Location
The Cache River Property is located about 120 kilometres (75 miles) west of Goose Bay, Labrador, a small town of 9,000 people on the Atlantic Coast of northern Canada. It takes approximately one and a half to two hours to drive to the Cache River Property from Goose Bay.
The Cache River Property lie within NTS map sheets 13E/01 and 13F/04 and extends approximately from 53o 11’ 08’’ N latitude and 62o 11’ 56’’ W longitude to 53o 06’ 34’’ N latitude and 61o 57’ 02’’ W longitude.
Goose Bay features an international airport. From there, the Cache River Property can be accessed directly from the Trans-Labrador Highway. The Cache River Property are easily accessible by the Trans-Labrador Highway, which runs through the central portion of the Cache River Property. The Trans-Labrador Highway is a well-maintained Provincial Highway with a gravel surface. There are no gas stations between Goose Bay and Churchill Falls, the next major community located 290 kilometres (180 miles) to the west of Goose Bay and 160 kilometres (105 miles) to the west of the Labrador Claims.
Access to the Cache River Property is possible for most of the year given the proximity to Goose Bay and the fact that the highway is well maintained. Airborne geophysical surveys are best performed either in late winter (March-April) or during the summer (June-August). Ground geophysical surveys should be scheduled to avoid freeze-up (November-December) and breakup (late April to early June). Ground geological surveys are best conducted with no snow cover (mid June to mid November).
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Figure 1. Cache River Property Location
Description of Claims
The Cache River Property consists of a total of 53 mineral claims of which 6 claims are held under Licence 013472M and an additional 47 claims were recently staked and are held under Licenses 031643M and 031889M as described in the table below. A layout of the claims is shown in Figure 2 below.
| Summary of the Claims | ||||
| Number | # of Claims | NTS | Area | Good to Date |
| (hectares) | ||||
| 013472M | 6 | 13F/04 | 150 | 05-17-2027 |
| 031643M | 29 | 13F/04 | 725 | 12-13-2025 |
| 031889M | 18 | 13F/04 | 450 | 01-20-2026 |
In the Province of Newfoundland and Labrador a mineral claim consists of a 25-hectare square measuring 500 meters per side. A single license can contain from one to 256 claims. The claims are unencumbered and in good standing and there are no third-party conditions which affect the claims other than conditions defined by the Province of Newfoundland and Labrador described below. The claims together make up an aggregate area of 2,825 hectares. We have no insurance covering the claims. Management believes that no insurance is necessary since the claims are unimproved and contain no buildings or improvements.
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Figure 2 Cache River Property Claims Location
There is no assurance that a commercially viable mineral deposit exists on the Cache River Property. Further exploration will be required before an evaluation as to the economic feasibility of the Cache River Property is determined. Our consulting geophysicist has written a report and provided us with recommendations of how we should explore the property. Until management can validate otherwise, the property is without known reserves.
Exploration Permits
Exploration Permit E220178 was granted by the Government of Newfoundland and Labrador for exploration on the Cache River Property until November 17, 2023. The Company will be applying for a new permit for the 2024 exploration All exploration in Labrador requires approval from the Innu Nation as part of the permitting process.
Mineralization
Mineral occurrences discovered to date on the Cache River property consists of disseminated copper +/- gold mineralization occurring within Grenvillian gneisses exposed along a 20-30 kilometer section the Trans Labrador Highway in south central Labrador. Mineralization observed consists largely of disseminated and stringer chalcopyrite, pyrite and pyrrhotite hosted within medium to dark grey, strongly foliated metasedimentary gneisses. Some mineralization appears to be associated with strongly deformed mafic intrusive or extrusive rocks. Prospecting results include a high of 6.4% copper and 108 ppb gold from a grab sample. Best results from diamond drilling in 2010 include 21 meters grading 0.04% copper. The highest grade intersection was from CR1-05-11 which returned 0.49% copper and 427 ppb gold over 0.50 m. While work to date has failed to outline a significant deposit, the fact remains that outside of the immediate area of the roadside exposures, very little has been done, and the area in general remains largely unexplored. Mineral exploration in the region surrounding the Cache River property is limited to potentially significant Rare Earth Element (REE) mineralization discovered in 2006 at Pope’s Hill, 30 kilometers east of the Cache River property; and by iron bearing river sands in the Lower Churchill River Valley. These items, and others, will be discussed under Adjacent Properties Section.
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Internal Controls Disclosure
The Company has not conducted any exploration on the Cache River Property since 2012 The Company will establish internal control procedures once active exploration activities resume on the Cache River Property are underway.
Subsidiaries
We do not have any subsidiaries.
Intellectual Property
We do not own, either legally or beneficially, any patent or trademark.
REPORTS TO SECURITY HOLDERS
We are not required to deliver an annual report to our stockholders but will voluntarily send an annual report, together with our annual audited financial statements upon request. We are required to file annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission. Our Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at http://www.sec.gov.
The public may read and copy any materials filed by us with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We are an electronic filer. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Internet address of the site is http://www.sec.gov.
Item 1A. Risk Factors
Much of the information included in this annual report includes or is based upon estimates, projections or other "forward looking statements". Such forward-looking statements include any projections and estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".
If we do not obtain additional financing, the business plan will fail.
Our current operating funds are insufficient to complete the next phases of our proposed exploration program on our Labrador mineral claims. We will need to obtain additional financing in order to complete our business plan and our proposed exploration program. Our business plan calls for significant expenses in connection with the exploration of the Labrador Claims. We have not made arrangements to secure any additional financing.
Because we have only recently commenced business operations, we face a high risk of business failure and this could result in a total loss of your investment.
We are not currently conducting any exploration and are in the initial stages of exploration of the Labrador Claims, and thus have no way to evaluate the likelihood whether our company will be able to operate our business successfully. Our Company was incorporated on February 23, 2006 and to date we have been involved primarily in organizational activities, obtaining financing and preliminary exploration of the Labrador Claims. We have not earned any revenues and we have never achieved profitability as of the date of this annual report. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in the light of problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that our company plans to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. We have no history upon which to base any assumption as to the likelihood that its business will prove successful, and we can provide no assurance to investors that our company will generate any operating revenues or ever achieve profitable operations. If our company is unsuccessful in addressing these risks its business will likely fail and you will lose your entire investment.
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Because our company has only recently commenced business operations, we expect to incur operating losses for the foreseeable future.
Our company has never earned any revenue and our company has never been profitable. Prior to completing exploration on the Labrador Claims, we may incur increased operating expenses without realizing any revenues from the Labrador Claims, this could cause our company to fail and you will lose your entire investment.
If we do not find a joint venture partner for the continued development of our mineral claims, we may not be able to advance exploration work.
If the results of the exploration program are successful, we may try to enter into a joint venture agreement with a partner for the further exploration and possible production of the Labrador Claims. Our company would face competition from other junior mineral resource exploration companies who have properties that they deem to be attractive in terms of potential return and investment cost. In addition, if our company entered into a joint venture agreement, our company would likely assign a percentage of our interest in the Labrador Claims to the joint venture partner. If our company is unable to enter into a joint venture agreement with a partner, our company may fail and you may lose your entire investment.
Because of the speculative nature of mineral property exploration, there is substantial risk that no commercially viable deposits will be found and our business will fail.
Exploration for base and precious metals is a speculative venture involving substantial risk. We can provide investors with no assurance that the Labrador Claims contain commercially viable mineral deposits. The exploration program that our company will conduct on the Labrador Claims may not result in the discovery of commercial viable mineral deposits. Problems such as unusual and unexpected rock formations and other conditions are involved in base and precious metal exploration and often result in unsuccessful exploration efforts. In such a case, we may be unable to complete our business plan and you could lose your entire investment.
Because of the inherent dangers involved in base and precious metal exploration, there is a risk that our company may incur liability or damages as we conducts our business.
The search for base and precious metals involves numerous hazards. As a result, our company may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. Our company currently has no such insurance nor do we expect to get such insurance in the foreseeable future. If a hazard were to occur, the costs of rectifying the hazard may exceed our asset value and cause our company to liquidate all of our assets resulting in the loss of your entire investment.
Because access to our company's mineral claims is often restricted by inclement weather, we will be delayed in exploration and any future mining efforts.
Access to the Labrador mineral claims is restricted to the period between May and November of each year due to snow in the area. As a result, any attempts to visit, test, or explore the property are largely limited to these few months of the year when weather permits such activities. These limitations can result in significant delays in exploration efforts, as well as mining and production in the event that commercial amounts of minerals are found. Such delays can result in our company's inability to meet deadlines for exploration expenditures as defined by the Province of Newfoundland and Labrador. This could cause the business venture to fail and the loss of your entire investment unless our company can meet the deadlines.
As our company undertakes exploration of the Labrador Claims, we will be subject to compliance with government regulation that may increase the anticipated time and cost of its exploration program.
There are several governmental regulations that materially restrict the exploration of minerals. Our company will be subject to the mining laws and regulations as contained in the Mineral Act of the Province of Newfoundland and Labrador as we carry out our exploration program. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these regulations. While our company's planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our time and costs of doing business and prevent our company from carrying out our exploration program.
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Because market factors in the mining business are out of our control, our company may not be able to market any minerals that may be found.
The mining industry, in general, is intensely competitive and we can provide no assurance to investors even if minerals are discovered that a ready market will exist from the sale of any base or precious metals found. Numerous factors beyond our control may affect the marketability of base or precious metals. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our company not receiving an adequate return on invested capital and you may lose your entire investment.
Because our company holds a significant portion of our cash reserves in United States dollars, we may experience weakened purchasing power in Canadian dollar terms.
Our company holds a significant portion of our cash reserves in United States dollars. Due to foreign exchange rate fluctuations, the value of these United States dollar reserves can result in both translation gains or losses in Canadian dollar terms. If there was to be a significant decline in the United States dollar versus the Canadian Dollar, our USdollar purchasing power in Canadian dollars would also significantly decline. Our company has not entered into derivative instruments to offset the impact of foreign exchange fluctuations.
Our auditors have expressed substantial doubt about our company's ability to continue as a going concern.
The accompanying financial statements have been prepared assuming that our company will continue as a going concern. As discussed in Note 1 to the May 31, 2023, financial statements, our company was incorporated on February 23, 2006, and has never generated any revenue, has a working capital deficiency, and has incurred operating losses since inception. As a result, our company's auditor has expressed substantial doubt about the ability of our company to continue as a going concern. Continued operations are dependent on our ability to complete equity or debt financing or generate profitable operations. Such financing may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.
Our stock is a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations which may limit a stockholder's ability to buy and sell our stock.
Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker- dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
OTC Markets has placed a "Shell Risk" identifier on the Company's page on OTC Markets website.
OTC Markets has placed a "Shell Risk" identifier on the Company's page on OTC Markets website. The Company is not in agreement that it is a "Shell Company" as defined in Rule 12b-2 of the Exchange Act due to the operations conducted by the Company in the past few years in the technology sector, and that such operations have been more than nominal. If advisable or beneficial for the Company or its shareholders, the Company may elect to pursue the appeal process with OTC Markets to have the "Shell Risk" identifier removed.
15
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We do not own any real property. Our principal business offices are located at #55-11020 Williams Road, Richmond British Columbia, Canada, V7A 1X8 at a cost of CDN $1,000 per month on a month-to-month basis.
Item 3. Legal Proceedings
Other than as set out below, our company is not a party to any pending legal proceeding and no legal proceeding is contemplated or threatened as of the date of this annual report.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
Public Market for Common Stock
Our stock is quoted on the OTC Pink under the symbol WOLV.
Stockholders of Our Common Shares
As of the date of this annual report, we have 261 registered shareholders.
Stock Option Grants
No stock options were granted during the year ended May 31, 2023.
Warrants
We have not issued and do not have any outstanding warrants to purchase shares of our common stock.
Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
| 1. | we would not be able to pay our debts as they become due in the usual course of business; or |
| 2. | our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution. |
We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
Securities Authorized for Issuance Under Equity Compensation Plans
On May 28, 2010 our directors approved the adoption of our 2010 Stock Plan which permits our company to issue up to 257,363 shares of our common stock, and 257,363 options to acquire shares of common stock, to directors, officers, employees and consultants of our company upon the grant of stock or the exercise of stock options granted under the 2010 Plan. As at May 31, 2023, there were none issued.
16
Transfer Agent
Our common shares are issued in registered form. Empire Stock Transfer, Inc. Telephone: (702) 818-5898; Facsimile: (702) 974-1444 is the registrar and transfer agent for our common shares.
As of September 22, 2023, we have 275 registered stockholders and 100,974,373 shares of common stock outstanding.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during the year ended May 31, 2023.
Recent Sales of Unregistered Securities
On January 27, 2023, we issued 1,250,000 shares of our common stock in a private placement at a purchase price of CDN $0.05 (USD $0.04) raising gross proceeds of CDN $62,500 (USD $49,361). We have issued all of the shares to six (6) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On January 27, 2023, we issued 7,200,000 shares of our common stock in a private placement at a purchase price of CDN $0.025 (USD $0.02) raising gross proceeds of CDN $180,000 (USD $133,410). We have issued all of the shares to thirteen (13) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On January 27, 2023, we issued 420,000 shares of our common stock in a private placement at a purchase price of USD $0.02 raising gross proceeds of USD $8,400. We have issued all of securities to two (2) U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) relying upon Rule 506 of Regulation D of the Securities Act of 1933.
On January 27, 2023, we issued 450,000 shares of our common stock pursuant to debt settlement agreements with two (2) individuals. The deemed price of the shares issued was USD $0.002 per share. We have issued all of securities to two (2) U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) relying upon Rule 506 of Regulation D of the Securities Act of 1933.
On January 27, 2023, we issued 5,240,000 shares of our common stock pursuant to debt settlement agreements with nine (9) individuals. The deemed price of the shares issued was CDN $0.025 (USD $0.02) per share. We have issued all of the shares to nine (9) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
Purchase of Equity Securities by the Issuer
Wolverine did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended May 31, 2023.
Item 6. Selected Financial Data
As a "smaller reporting company", we are not required to provide the information required by this Item.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended May 31, 2023, and 2022 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 9 of this annual report.
17
Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States generally accepted accounting principles.
Cash Requirements
There is limited historical financial information about us upon which to base an evaluation of our performance. We have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
Over the next twelve months we intend to use any funds that we may have available to fund our operations and conduct exploration on our Labrador Claims. We expect to review other potential exploration projects from time to time as they are presented to us.
Not accounting for our working capital deficit of $92,143 as of May 31, 2023, we require additional funds of approximately $152,000 at a minimum to proceed with our plan of operation over the next twelve months. As we do not have the funds necessary to cover our projected operating expenses for the next twelve-month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.
Our auditors have issued a going concern opinion for our year ended May 31, 2023. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. As we had minimal cash and a working capital deficit in the amount of $92,143 as of May 31, 2023, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months. We plan to complete debt financings and/or private placement sales of our common stock in order to raise the funds necessary to pursue our plan of operation and to fund our working capital deficit in order to enable us to pay our accounts payable and accrued liabilities. We currently do not have any arrangements in place for the completion of any debt financing or private placement financing and there is no assurance that we will be successful in completing any debt financing or private placement financing. Our success or failure will be determined by what we find under the ground.
Plan of Operation
The Plan of Operation for the next 12 months is to raise $152,000 for the exploration program on the Frog Property.
As at May 31, 2023, we had cash of $208. We will need to raise additional financing to fund our exploration program over the next 12 months.
The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Purchase of Significant Equipment
We did not purchase any significant equipment over the twelve months ending May 31, 2023.
18
Results of Operations for the Years Ended May 31, 2023 and 2022
The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended May 31, 2023 and 2022.
Our operating results for the years ended May 31, 2023 and 2022 are summarized as follows:
| Year Ended May 31 |
||||||
| 2023 | 2022 | |||||
| Revenue | $ | - | $ | - | ||
| Operating expenses | $ | (333,490 | ) | $ | (3,400,807 | ) |
| Other income (expenses) | $ | (76,412 | ) | $ | (280,462 | ) |
| Net loss | $ | (409,902 | ) | $ | (3,681,269 | ) |
Revenues
We have not earned any revenues since our inception and we do not anticipate earning revenues in the near future.
Operating Expenses
Our operating expenses for the years ended May 31, 2023 and 2022 are outlined in the table below:
| Year Ended May 31 |
||||||
| 2023 | 2022 | |||||
| General and administrative | $ | 303,381 | $ | 498,419 | ||
| Impairment (recovery) of mineral properties | $ | - | $ | 2,861,952 | ||
| Mineral exploration costs | $ | 30,109 | $ | 40,436 | ||
The decrease in general and administrative expenses for the year ended May 31, 2023 of $195,038, compared to the same period in fiscal 2022, was mainly due to:
- a decrease in consulting fees of $142,337, mainly due to a decrease in consulting services during the year;
- a decrease in interest expense of $12,396, due to an adjustment made during the year ended May 31, 2022;
- a decrease in transfer agent and filing fees of $30,424, mainly due to a decrease in share issuances;
- and a decrease in office expenses of $6,430.
Mineral property and exploration costs decreased by $10,327 from $40,436 during the year ended May 31, 2022 to $30,109 during the year ended May 31, 2023. Mineral property exploration costs decreased during the year as a result of a decrease in exploration costs incurred during exploration of the Frog Property and a staking license fees refund of $2,350.
Impairment of mineral properties decreased by $2,861,952 from an impairment of $2,861,952 during the year ended May 31, 2022 to $Nil during the year ended May 31, 2023. Impairment of mineral properties during the year ended May 31, 2022 was primarily due to the uncertainty of establishing proven and probable outputs from the Frog Property acquisition.
19
Liquidity and Financial Condition
Working Capital
| At May 31, 2023 |
At May 31, 2022 |
|||||
| Current assets | $ | 2,501 | $ | 9,349 | ||
| Current liabilities | 94,644 | 81,517 | ||||
| Working deficit | $ | (92,143 | ) | $ | (72,168 | ) |
Cash Flows
| Year Ended May 31 |
||||||
| 2023 | 2022 | |||||
| Net Cash Used in Operating Activities | $ | (216,843 | ) | $ | (296,976 | ) |
| Net Cash Used in investing activities | - | (7,334 | ) | |||
| Net Cash Provided by Financing Activities | 210,757 | 301,493 | ||||
| Net change in cash during period | $ | (6,086 | ) | $ | (2,817 | ) |
Operating Activities
Net cash used in operating activities during the year ended May 31, 2023 was $216,843 compared to $296,976 for the year ended May 31, 2022. The decrease in cash used in operating activities was primarily a result of a decrease in net loss to $409,902 for the year ended May 31, 2023, offset by non-cash item including a loss of settlement of debt of $80,888 and a net change in operating assets and liabilities of $112,171, compared to a net loss of $3,681,269 for the year ended May 31, 2022, offset by non-cash items including an impairment of mineral property costs of $2,861,952, a loss of settlement of debt of $395,493, gain on write-down of accounts payable of $100,733 and a net change in operating assets and liabilities of $227,581.
Investing Activities
Net cash provided by investing activities during the year ended May 31, 2023 was $Nil compared to net cash used in investing activities of $7,334 for the year ended May 31, 2022, resulting from a decrease in mineral property claim acquisition costs.
Financing Activities
During the year ended May 31, 2023, we received proceeds of $210,757 from financing activities, which included advances from related parties of $8,600 and proceeds from common stock issued and subscribed of $202,157. During the year ended May 31, 2022, we received proceeds of $301,493 from financing activities from common stock issued and subscribed.
Contractual Obligations
As a "smaller reporting company", we are not required to provide tabular disclosure obligations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
20
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our audited financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Mineral Property Costs
Our company has been in the exploration stage since its inception on February 23, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. Our company assesses the carrying costs for impairment under ASC 360, "Property, Plant, and Equipment", at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations. No mineral costs were incurred in the current period.
Stock-based Compensation
Our company records stock-based compensation in accordance with ASC 718, "Compensation-Stock Compensation" and ASC 505, "Equity Based Payments to Non-Employees", using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the
grant date fair value of the consideration received, or the fair value of the equity instrument issued, whichever is more reliably measurable.
NEW ACCOUNTING PRONOUNCEMENTS
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As a "smaller reporting company", we are not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data
Our audited financial statements are stated in United States dollars (US$) and are prepared in accordance with United States generally accepted accounting principles. The following audited financial statements are filed as part of this annual report:
21
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
May 31, 2023
(Expressed in U.S. dollars)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Wolverine Resources Corp.:
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Wolverine Resources Corp. ("the Company") as of May 31, 2023 and 2022, the related statements of operations, stockholders' deficit, and cash flows for each of the years in the two-year period ended May 31, 2023 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended May 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph Regarding Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has never generated revenues, is unlikely to generate earnings in the immediate or foreseeable future, has suffered recurring losses from operations and has a net capital deficiency, all of which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
/s/
We have served as the Company's auditor since 2018.
September 22, 2023
F-2
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Balance Sheets
(Expressed in U.S. dollars)
| May 31, 2023 $ |
May 31, 2022 $ |
|||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash | ||||||
| Other receivable | ||||||
| Prepaid expenses | ||||||
| Total Assets | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||
| Current Liabilities | ||||||
| Accounts payable and accrued liabilities | ||||||
| Accounts payable - related parties (Note 4) | ||||||
| Total Liabilities | ||||||
| Commitments and contingencies (Note 8) | ||||||
| Stockholders' Deficit | ||||||
| Common stock, |
||||||
| Subscriptions payable | ||||||
| Additional paid-in capital | ||||||
| Accumulated deficit | ( |
) | ( |
) | ||
| Total Stockholders' Deficit | ( |
) | ( |
) | ||
| Total Liabilities and Stockholders' Deficit |
(The accompanying notes are an integral part of these financial statements.)
F-3
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Statements of Operations
(Expressed in U.S. dollars)
| Year | Year | |||||
| Ended | Ended | |||||
| May 31, | May 31, | |||||
| 2023 | 2022 | |||||
| $ | $ | |||||
| Operating Expenses | ||||||
| General and administrative | ||||||
| Impairment of mineral properties | ||||||
| Mineral property exploration costs | ||||||
| Total Operating Expenses | ||||||
| Loss From Operations | ( |
) | ( |
) | ||
| Other Income (Expense) | ||||||
| Foreign exchange gain (loss) | ||||||
| Gain on derecognition of accounts payable | ||||||
| Loss on settlement of debt | ( |
) | ( |
) | ||
| Total Other Income (Expense) | ( |
) | ( |
) | ||
| Net Loss | ( |
) | ( |
) | ||
| Net Loss Per Common Share, Basic and Diluted | ( |
) | ( |
) | ||
| Weighted Average Common Shares Outstanding, Basic and Diluted |
(The accompanying notes are an integral part of these financial statements.)
F-4
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Statements of Stockholders' Deficit
For the Years Ended May 31, 2023 and 2022 (Expressed in U.S. dollars)
| Additional | ||||||||||||||||||
| Common Stock | Subscriptions | Paid-in | Accumulated | |||||||||||||||
| Shares* | Amount | Payable | Capital | Deficit | Total | |||||||||||||
| # | $ | $ | $ | $ | $ | |||||||||||||
| Balance, May 31, 2021 | ( |
) | ( |
) | ||||||||||||||
| Common stock issued for cash and subscriptions payable | ( |
) | - | |||||||||||||||
| Common stock issued to settle debt | - | - | ||||||||||||||||
| Common stock issued to purchase mineral property | - | - | ||||||||||||||||
| Common stock subscribed | - | - | - | - | ||||||||||||||
| Net loss for the year | - | - | - | - | ( |
) | ( |
) | ||||||||||
| Balance, May 31, 2022 | ( |
) | ( |
) | ||||||||||||||
| Common stock issued for subscriptions payable | ( |
) | - | |||||||||||||||
| Common stock issued for cash | - | - | ||||||||||||||||
| Common stock issued for debt | - | - | ||||||||||||||||
| Common stock cancelled | ( |
) | ( |
) | - | - | ||||||||||||
| Common stock subscribed | - | - | - | - | ||||||||||||||
| Net loss for the year | - | - | - | - | ( |
) | ( |
) | ||||||||||
| Balance, May 31, 2023 | ( |
) | ( |
) | ||||||||||||||
(*) The Company effected a 20:1 reverse stock split on July 27, 2022. All share and per share amounts have been retrospectively presented to reflect the reverse stock split.
(The accompanying notes are an integral part of these financial statements.)
F-5
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Statements of Cash Flows
(Expressed in U.S. dollars)
| Year | Year | |||||
| Ended | Ended | |||||
| May 31, | May 31, | |||||
| 2023 | 2022 | |||||
| $ | $ | |||||
| Operating Activities | ||||||
| Net loss | ( |
) | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
| Loss (Gain) on settlement of accounts payable | ( |
) | ||||
| Impairment of mineral properties | ||||||
| Loss on settlement of liabilities | ||||||
| Changes in operating assets and liabilities: | ||||||
| Other receivable | ||||||
| Prepaid expenses | ( |
) | ||||
| Accounts payable and accrued liabilities | ||||||
| Accounts payable - related parties | ||||||
| Net Cash Used in Operating Activities | ( |
) | ( |
) | ||
| Investing Activities | ||||||
| Acquisition of mineral properties | ( |
) | ||||
| Net Cash Used in Investing Activities | ( |
) | ||||
| Financing Activities | ||||||
| Advances from related parties | ||||||
| Proceeds from common stock issued and subscribed | ||||||
| Net Cash Provided by Financing Activities | ||||||
| Change in Cash | ( |
) | ( |
) | ||
| Cash, Beginning of Year | ||||||
| Cash, End of Year | ||||||
| Supplemental Disclosures: | ||||||
| Interest paid | ||||||
| Income taxes paid | ||||||
| Non-cash Investing and Financing Activities: | ||||||
| Common stock issued to settle accounts payable | ||||||
| Common stock issued to purchase mineral property | ||||||
| Common stock cancelled pursuant to amended property purchase agreement | ||||||
| Common stock issued for prior year subscriptions |
(The accompanying notes are an integral part of these financial statements.)
F-6
1. Organization and Basis of Presentation
Wolverine Resources Corp. (formerly Wolverine Technologies Corp.) (the "Company") was incorporated in the State of Nevada on February 23, 2006. The Company's principal business was the acquisition and exploration of mineral resources. The Company had not determined that its properties contain mineral reserves that were economically recoverable, financing had not yet become available, and commodity prices had not fully recovered. Therefore, management decided to change the focus of the Company to include cyber security. Effective July 27, 2022, the Company changed its name from Wolverine Technologies Corp. to Wolverine Resources Corp. The Company has now refocused its efforts back to the exploration of mineral resources.
The outbreak of the novel coronavirus COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies, disruptions of financial markets, and created uncertainty regarding potential impacts to the Company's operations. The COVID- 19 pandemic has impacted and could further impact the Company's operations and the operations of the Company's suppliers and vendors as a result of quarantines, facility closures, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts the Company's business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on the Company's suppliers and vendors and the remedial actions and stimulus measures adopted by local and federal governments, and to what extent normal economic and operating conditions can resume. The management team is closely following the progression of COVID-19 and its potential impact on the Company. Even after the COVID-19 pandemic has subsided, the Company may experience adverse impacts to its business as a result of any economic recession or depression that has occurred or may occur in the future. Therefore, the Company cannot reasonably estimate the impact at this time on its business, liquidity, capital resources and financial results.
Going Concern
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues and is unlikely to generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. The Company plans to raise financing through debt or equity. There can be no assurance that additional financing will be available when needed or, if available, that it can be obtained on commercially reasonable terms. At May 31, 2023, the Company has a working capital deficiency of $
2. Summary of Significant Accounting Policies
(a) Basis of Presentation
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company's fiscal year-end is May 31.
(The accompanying notes are an integral part of these financial statements.)
F-7
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Notes to the Financial Statements May 31, 2023
(Expressed in U.S. dollars)
(b) Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
(c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
(d) Mineral Property Costs
The Company has been in the exploration stage since its inception on February 23, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. Our company assesses the carrying costs for impairment under ASC 360, "Property, Plant, and Equipment", at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
(e) Income Taxes
The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Uncertain tax positions are recognized in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision. There are currently no unrecognized tax benefits that if recognized would affect the tax rate. There was $
(f) Foreign Currency Translation
The Company's functional and reporting currency is the United States dollar. Occasional transactions may occur in Canadian dollars and management has adopted ASC 830, "Foreign Currency Translation Matters". Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
(The accompanying notes are an integral part of these financial statements.)
F-8
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Notes to the Financial Statements May 31, 2023
(Expressed in U.S. dollars)
(g) Earnings (Loss) Per Share
The Company computes earnings (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. At May 31, 2023 and 2022, the Company had no dilutive shares outstanding.
(h) Flow-through shares
The Company may issue flow-through common shares to finance a significant portion of its exploration program. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource expenditures to investors. Under ASC 740, "Income Taxes", the proceeds from issuance should be allocated between the offering of shares and the sale of tax benefits. The allocation is made based on the difference between the quoted price of the existing shares and the amount the investor pays for the shares. A liability is recognized for this difference. Upon resource expenditures being incurred and renounced, the Company derecognizes the liability and the premium is recognized as other income.
Proceeds received from the issuance of flow-through common shares are restricted to be used only for Canadian resource property exploration expenditures within a two-year period. The Company may also be subject to Part XII.6 tax under the Canadian Income Tax Act on flow-through proceeds renounced under a Look-back Rule, in accordance with Government of Canada flow-through regulations. When applicable, this tax is accrued as a financial expense until paid.
(i) Financial Instruments and Fair Value Measures
ASC 820, "Fair Value Measurements and Disclosures", requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model- derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company's financial instruments consist principally of cash, other receivables, accounts payable and amounts due to related parties. Pursuant to ASC 820, the fair value of cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
(The accompanying notes are an integral part of these financial statements.)
F-9
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Notes to the Financial Statements May 31, 2023
(Expressed in U.S. dollars)
(j) Stock-based Compensation
The company records stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation” and ASC 505, “Equity Based Payments to Non-Employees”, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the grant date fair value of the consideration received, or the fair value of the equity instrument issued, whichever is more reliably measurable.
3. Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
4. Related Party Transactions
(a) During the year ended May 31, 2023, the Company incurred consulting fees of $
(b) During the year ended May 31, 2023, the Company incurred consulting fees of $
(c) During the year ended May 31, 2023, the Company recorded consulting fees of $
(d) On February 28, 2022, the Company acquired a
5. Mineral Properties
(a) In November 2020 and April 2021, the Company staked mineral claims located in Labrador, Canada for $
(The accompanying notes are an integral part of these financial statements.)
F-10
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Notes to the Financial Statements May 31, 2023
(Expressed in U.S. dollars)
(b) On February 28, 2022, the Company entered into a Property Purchase Agreement with Rich Resources Inc. (formerly 86835 Newfoundland & Labrador Corp.) ("Rich"), a non-arm's length party, to acquire a
On August 9, 2022, the Company amended the Property Purchase Agreement with Rich. Under the terms of the Amended Property Purchase Agreement, the number of shares issued pursuant to the acquisition was reduced from
During the year ended May 31, 2022, the Company wrote off mineral property acquisition costs of $
6. Common Stock
Authorized
Issued and outstanding
Stock transactions during the year ended May 31, 2023:
(a) On August 17, 2022, the Company returned and cancelled
(b) On November 30, 2022, the Company returned and cancelled
(c) On January 27, 2023, the Company issued
(d) On January 27, 2023, the Company issued
(e) On January 27, 2023, the Company issued
(f) On January 27, 2023, the Company issued
(g) During the year ended May 31, 2023, the Company received proceeds of $
(The accompanying notes are an integral part of these financial statements.)
F-11
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Notes to the Financial Statements May 31, 2023
(Expressed in U.S. dollars)
Stock transactions during the year ended May 31, 2022:
(a) On July 26, 2021, the Company issued
(b) On July 26, 2021, the Company issued
(c) On November 30, 2021, the Company issued
(d) On November 30, 2021, the Company issued
(e) On February 28, 2022, the Company issued
(f) On March 10, 2022, The Company issued
(g) On March 10, 2022, the Company issued
(h)
At May 31, 2023 and 2022, the Company had no dilutive shares, or common stock equivalents.
7. Income Taxes
The Company has net operating losses carried forward of $
The Company was subject to United States federal and state income taxes at an approximate rate of
The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company's income tax expense as reported is as follows:
| 2023 $ |
2022 $ |
|||||
| Income tax recovery at statutory rate | ( |
) | ( |
) | ||
| Temporary differences | ||||||
| Valuation allowance change | ||||||
| Provision for income taxes |
(The accompanying notes are an integral part of these financial statements.)
F-12
WOLVERINE RESOURCES CORP.
(Formerly Wolverine Technologies Corp.)
Notes to the Financial Statements May 31, 2023
(Expressed in U.S. dollars)
The significant components of deferred income tax assets and liabilities at May 31, 2023 and 2022, are as follows:
| 2023 $ |
2022 $ |
|||||
| Mineral property costs | ||||||
| Net operating losses carried forward | ||||||
| Gross deferred income tax assets | ||||||
| Valuation allowance | ( |
) | ( |
) | ||
| Net deferred income tax asset |
8. Subsequent Events
(a) On July 19, 2023, the Company entered into a Second Amendment of the Purchase Agreement with Rich Resources Inc. ("Rich") formerly 86835 Newfoundland & Labrador Corp. relating to the acquisition of a
(b) On September 6, 2023, the Company issued
(c) On September 6, 2023, the Company issued
(d) On September 6, 2023, the Company issued
(e) On September 21, 2023, the Company received proceeds of $
(The accompanying notes are an integral part of these financial statements.)
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
There were no disagreements related to accounting principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years and interim periods.
Item 9A (T). Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15€ promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2023. Based on the evaluation of these disclosure controls and procedures, and in light of the weaknesses identified below, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining effective internal control over financial reporting. Under the supervision of our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of May 31, 2023, using the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of May 31, 2023, the Company determined that there were significant deficiencies that constituted material weaknesses, as described below.
(1) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;
(2) inadequate segregation of duties consistent with control objectives;
(3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and
(4) ineffective controls over period end financial disclosure and reporting processes.
Management is currently evaluating remediation plans for the above control deficiencies.
In light of the existence of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company's internal controls.
As a result, management has concluded that the Company's internal control over financial reporting as of May 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by COSO was not effective.
22
This Annual Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only management's report in this annual report.
Changes in Internal Control
During the year ended May 31, 2023, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent limitations on effectiveness of controls
Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Item 9B. Other Information
None
PART III
Item 10. Directors, Executive Officers and Corporate Governance
All of the directors of our company hold office until the next annual meeting of the stockholders or until their successors have been elected and qualified. Our officers are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:
| Name | Position Held with the Company | Age | Date First Elected or Appointed |
| Bruce Costerd | Chief Executive Officer and Director | 67 | January 24, 2022 |
| Richard Haderer | Chief Financial Officer and Director | 59 | April 13, 2015 |
| Luke Rich | Director | 57 | June 14, 2010 |
| Slade Dyer | Director | 67 | November 9, 2022 |
| Don Bowins | Director | 71 | May 23, 2023 |
Business Experience
The following is a brief account of the education and business experience of each director and executive officer during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he was employed.
23
Bruce Costerd
Mr. Costerd is responsible for the financing and management of Wolverine and its mineral projects. Mr. Costerd has spent over twenty-five years in the financing and management of exploration projects in Newfoundland and Labrador and is responsible for introducing Wolverine to its current projects, the Frog Property and the Cache River Property.
Prior to Wolverine Mr. Costerd was CEO and a director of Gallery Resources Limited ("Gallery") from 1990 to 2006. Gallery was a junior mineral exploration and development company with projects in the Provinces of British Columbia and Newfoundland and Labrador. Gallery conducted exploration on a number of projects in the Province of Newfoundland and Labrador between 1995 and 2006 and incurred exploration expenditures in excess of $10,000,000 during that period. Gallery also owned certain mining claims located in the Cariboo Mining Division of British Columbia and incurred acquisition costs and development expenses on the claims totaling approximately $3,000,000.
Richard Haderer
Mr. Haderer has worked as a regulatory consultant for Wolverine since February of 2006. Mr. Haderer has been President of PubCo Services Inc. since April 1996. PubCo Services Inc. provides regulatory consulting services to publicly traded companies. Mr. Haderer has also served as a director and officer of several publicly traded companies. From November 1989 to April 1996, Mr. Haderer worked as a Listing Analyst with the Alberta Stock Exchange (now the TSX Venture Exchange).
Luke Rich
Mr. Rich is a member of the Innu Nation and Mushuau Innu First Nations and is a former VP of the Innu Nation. Prior to joining Wolverine, Mr. Rich was also Co-CEO of the Innu Development Limited Partnership ("IDLP") from October 2007 to April 2010. IDLP participated in the construction of the mine and mill for the Voisey Bay Nickel Project. Mr. Rich is also a board member of various IDLP owned companies including Innu Mikun Airlines, Innu Keiwit Constructor LP and the Innu/SNC Lavalin Partnership.
Slade Dyer
Slade Dyer has a broad spectrum of experience in land use planning, local government administration and project management, in both the public and private sectors. He spent 6 years in Provincial/Municipal land development approvals and 12 years in local government administration. He then transitioned into the private sector and has been operating a land development consulting business for the last 26 years. Slade has done project management for developments throughout British Columbia, as well as in Washington and California. He has also been qualified a number of times as an expert witness to give evidence in the areas of land use planning and land development before the Courts.
Don Bowins
Don Bowins is Civil Engineer (P. Eng.) registered in BC and has run his own private engineering practice under D. K Bowins & Assoc. Inc. since 1994. Prior to that he worked as an engineer in the public sector from 1975 to 1994. In the public sector his work was centered on design, construction and governance, in both Alberta and British Columbia, with his last job being the Director of Engineering and Public Works for the then District of Abbotsford in B.C.
Family Relationships
There are no family relationships among our directors or officers.
Corporate Governance
Corporate Governance relates to the activities of the Board of Directors. National Instrument 58-201(Canada) establishes corporate governance guidelines which apply to all public companies. The Company has reviewed its own corporate governance practices in light of these guidelines. In certain cases, the Company's practices comply with the guidelines, however, the Board considers that some of the guidelines are not suitable for the Company at its current stage of development and therefore these guidelines have not been adopted. National Instrument 58-201 mandates disclosure of corporate governance practices which disclosure is set out below. The Board is committed to sound corporate governance practices in the interest of its shareholders and contribute to effective and efficient decision making. The Company will continue to review and implement corporate governance guidelines as the business of the Company progresses.
24
Board of Directors
The Company's Board consists of five directors, Bruce Costerd, Richard Haderer, Luke Rich, Slade Dyer and Don Bowins. Slade Dyer and Don Bowins are the independent directors of the Company. Bruce Costerd is not independent as he is the Chief Executive Officer of the Company. Richard Haderer is not independent as he is the Chief Financial Officer of the Company. Luke Rich is not independent as he is a paid consultant for the Company.
The size of the Company is such that all of the Company's operations are conducted by a small management team which is also represented on the Board. Any director may submit items for inclusion in the agenda of matters to be discussed at meetings of the Board. The Board considers that management is effectively supervised by the independent directors on an informal basis as the independent directors are actively and regularly involved in reviewing the operations of the Company and have regular and full access to management. The independent directors will be able to meet at any time without any members of management being present. Further supervision is performed through the audit committee which will be composed of a majority of independent directors. The independent directors exercise their responsibilities for independent oversight of management through their majority control of the Board.
Directorships
None of the directors are directors of other reporting issuers.
Orientation and Continuing Education
The Board does not have a formal orientation or education program for its members. New Board members will be provided with information respecting the functioning of the Board of Directors, audit committee, access to all of the publicly filed documents of the Company and complete access to management and the Company's professional advisors.
Board members are encouraged to communicate with management and the auditors, to keep themselves current with industry trends and developments and changes in legislation with the Company's assistance, to attend industry seminars and to visit the Company's operations. Board members have full access to the Company's records and legal counsel.
Ethical Business Conduct
The Board believes good corporate governance in an integral component to the success of the Company and to meet responsibilities to shareholders.
At present the Board has not adopted guidelines or stipulations or a code to encourage and promote a culture of ethical business conduct due to the size of its Board and its limited activities. The Company does promote ethical business conduct through the nomination of Board members it considers ethical.
Nomination of Directors
The Board has responsibility for identifying and assessing potential Board candidates. Recruitment of new directors has generally resulted from recommendations made by directors, management and shareholders. The Board assesses potential Board candidates to fill perceived needs on the Board for required skills, expertise, independence and other factors.
25
Compensation
The directors decide as a Board the compensation for the Company's directors and officers. Compensation payable is determined by considering compensation paid for director's and CEO's of companies of similar size and stage of development in the mineral exploration industry and determining appropriate compensation reflecting the need to provide incentive and compensation for the time and effort expended by the directors and senior management while taking into account the financial and other resources of the Company. In setting the compensation, the performance of the CEO is reviewed in light of the Company's objectives and other factors that may have impacted the success of the Company.
Other Board Committees
The members of the audit committee are Slade Dyer, Richard Haderer and Don Bowins. Slade Dyer is the Chairman of the audit committee.
The Board is of the view that the size of the Company's operations does not warrant additional committees at this stage of the Company's development.
Assessments
The Board does not consider that formal assessments would be useful at this stage of the Company's development.
Involvement in Certain Legal Proceedings
Our directors, executive officers and control persons have not been involved in any of the following events during the past five years:
1. any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2. any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
3. being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4. being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors and persons who own more than 10% of our common stock to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.
Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended May 31, 2023, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with.
26
Audit Committee
The Audit Committee's role is to act in an objective, independent capacity as a liaison between the auditors, management and the Board and to ensure the auditors have a facility to consider and discuss governance and audit issues with parties not directly responsible for operations. NI 52-110, NI 41-101and Form 52-110F2 require the Company, as a venture issuer, to disclose certain information relating to the Company's audit committee and its relationship with the Company's independent auditors.
Audit Committee Charter
Mandate
The primary function of the audit committee (the "Committee") is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company's systems of internal controls regarding finance and accounting and the Company's auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels. The Committee's primary duties and responsibilities are to:
- Serve as an independent and objective party to monitor the Company's financial reporting and internal control system and review the Company's financial statements.
- Review and appraise the performance of the Company's external auditors.
- Provide an open avenue of communication among the Company's auditors, financial and senior management and the Board of Directors.
Composition
The Committee shall be comprised of three directors as determined by the Board of Directors, whom shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.
The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders' meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.
Meetings
The Committee shall meet annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors.
Responsibilities and Duties
To fulfill its responsibilities and duties, the Committee shall:
Documents/Reports Review
(a) Review and update this Charter annually.
(b) Review the Company's financial statements, MD&A and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.
27
External Auditors
(a) Review annually, the performance of the external auditors who shall be ultimately accountable to the Board of Directors and the Committee as representatives of the shareholders of the Company.
(b) Obtain annually, a formal written statement of the external auditors setting forth all relationships between the external auditors and the Company, consistent with Independence Standards Board Standard 1.
(c) Review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors.
(d) Take, or recommend that the full Board of Directors take, appropriate action to oversee the independence of the external auditors.
(e) Recommend to the Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval.
(f) At each meeting, consult with the external auditors, without the presence of management, about the quality of the Company's accounting principles, internal controls and the completeness and accuracy of the Company's financial statements.
(g) Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements.
(h) Review and pre-approve all audit and audit related services and the fees and other compensation related thereto, and any non-audit services, provided by the Company's external auditors. The pre- approval requirement is waived with respect to the provision of non-audit services if:
(i) the aggregate amount of all such non-audit services provided to the Company constitutes not more than five percent of the total amount of revenues paid by the Company to its external auditors during the fiscal year in which the non-audit services are provided;
(ii) such services were not recognized by the Company at the time of the engagement to be non- audit services; and
(iii) such services are promptly brought to the attention of the Committee by the Company and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals have been delegated by the Committee.
Provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee.
Financial Reporting Processes
(a) In consultation with the external auditors, review with management the integrity of the Company's financial reporting process, both internal and external.
(b) Consider the external auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting.
(c) Consider and approve, if appropriate, changes to the Company's auditing and accounting principles and practices as suggested by the external auditors and management.
(d) Review significant judgments made by management in the preparation of financial statements and the view of the external auditors as to the appropriateness of such judgments.
28
(e) Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.
(f) Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements.
(g) Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented.
(h) Review any complaints or concerns about questionable accounting, internal accounting controls or auditing matters.
(i) Review certification process.
Other
Review any related-party transactions.
Composition of Audit Committee
| Member | Independence | Financially literate |
| Slade Dyer (3) | Independent(1) | Financially literate(2) |
| Richard Haderer | Not Independent(1) | Financially literate(2) |
| Don Bowins | Independent(1) | Financially literate(2) |
Notes:
(1) A member of an audit committee is independent if the member has no direct or indirect material relationship with the Company, which could, in the view of the Board, reasonably interfere with the exercise of a member's independent judgment.
(2) An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company's financial statements.
(3) Slade Dyer is the Chairman of the audit committee.
Relevant Education and Experience
Each member of the Company's present Audit Committee has adequate education and experience that is relevant to his performance as an Audit Committee member and, in particular, the requisite education and experience that have provided the member with:
(a) an understanding of the accounting principles used by the Company to prepare its financial statements and the ability to assess the general application of those principles in connection with estimates, accruals and reserves;
(b) experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company's financial statements or experience actively supervising individuals engaged in such activities; and
(c) an understanding of internal controls and procedures for financial reporting.
The determination of the financially literacy of the members of our board of directors is made by the Company and each of the directors in question. The determination that Mr. Haderer is financial literate is based upon his experience and abilities gained as a consultant and regulator of publicly reporting mineral exploration companies. Mr. Dyer and Mr. Bowins is financially based upon his experienced gained in Project Management and Land Development. See "Directors and Executive Officers" for further details.
29
Audit Committee Oversight
At no time since the commencement of the Company's most recently completed financial year was a recommendation to nominate or compensate an external auditor not adopted by the Board.
Pre-Approval Policies and Procedures
The Audit Committee will pre-approve all non-audit services to be provided to the Corporation or its subsidiary entities by the Corporation's external auditor, however the Audit Committee has not adopted specific policies and procedures for such approval.
Exemption
The Company is a "venture issuer" as defined in National Instrument 52-110 and is relying on the exemption contained in Section 6.1 of National Instrument 52-110, which exempts the Corporation from the requirements of Part 3 (Composition of the Audit Committee) and Part 5 (Reporting Obligations) of National Instrument 52-110.
Code of Ethics
We adopted a Code of Ethics applicable to all of our directors, officers, employees and consultants, which is a "code of ethics" as defined by applicable rules of the SEC. Our Code of Ethics is attached as an exhibit to our registration statement on Form S-1 filed on July 15, 2008. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our chief executive officer, chief financial officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a Current Report on Form 8-K filed with the SEC.
Item 11. Executive Compensation
The particulars of the compensation paid to the following persons:
- our principal executive officer;
- each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended May 31, 2023 and 2022; and
- up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended May 31, 2023 and 2022,
who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:
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| SUMMARY COMPENSATION TABLE | |||||||||
| Name and Principal Position |
Year | Salary ($) | Bonus ($) | Stock Awards ($) |
Option |
Non-Equity Incentive Plan Compensation ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensati on ($) |
Total ($) |
| Bruce Costerd | 2023 | $89,759 | Nil | Nil | Nil | Nil | Nil | Nil | $89,759 |
| Chief Executive Officer and Director |
2022 | $110,440 | Nil | Nil | Nil | Nil | Nil | Nil | $110,440 |
| Richard Haderer | 2023 | $14,975 | Nil | Nil | Nil | Nil | Nil | Nil | $14,975 |
| Former Chief Executive Officer, Chief Financial Officer and Director) |
2022 | $15,832 | Nil | Nil | Nil | Nil | Nil | Nil | $15,832 |
Stock Options/SAR Grants
N/A.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values
There were no options exercised during our fiscal year ended May 31, 2023 or May 31, 2022 by any officer or director of our company.
Compensation of Directors
We reimburse our directors for expenses incurred in connection with attending board meetings. We have not paid any director's fees or other cash compensation for services rendered as a director since our inception to May 31, 2022.
We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors are expected in the future to receive stock options to purchase common shares as awarded by our board of directors or (as to future stock options) a compensation committee which may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. No director received and/or accrued any compensation for their services as a director, including committee participation and/or special assignments.
Employment Contracts and Termination of Employment and Change in Control Arrangements
On January 31, 2007 the Company entered into a Consulting Agreement (the "Agreement") with Texada Consulting Inc., a company controlled by our CEO, Bruce Costerd. Under the terms of the agreement consulting fees of USD
$10,000 per month are paid/accrued to Texada. Effective March 1, 2011 the amount of consulting fees was amended to CDN $10,000 per month. Texada will also receive a bonus (the "Bonus") of the issuance of 5% of the common shares of the Company issued and outstanding on a non-diluted basis as of the date of the payment of the bonus upon and only in the event of the discovery by the Company of a major mineral resource deposit in any of the properties currently held or acquired in the future that is of a sufficient size and value to support the commercial extraction and shipment of ore for the purpose of earning revenue (but excluding the extraction and shipment of ore for testing purposes).
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Consulting fees of CDN$20,000 per year are paid or accrued to PubCo Services Inc, a company controlled by Richard Haderer, CFO and a director of the Company.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.
We have no plans or arrangements with respect to remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of September 22, 2023, certain information with respect to the beneficial ownership of our common stock by each stockholder known by us to be the beneficial owner of more than 5% of our common stock and by each of our current directors and executive officers. Each person has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common stock, except as otherwise indicated.
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership |
Percentage of Class(1) |
| Rich Resources Inc. Natuashish, NL |
24,000,000 | 23.8% |
| Bruce Costerd Richmond, BC | 1,876,998 | 1.9% |
| Richard Haderer Calgary, Alberta | 4,101,500 | 4.1% |
| Luke Rich Natuashish, NL | 156,257 | 0.2% |
| Slade Dyer Mission, BC |
1,315,000 | 1.3% |
| Don Bowins Mission, BC |
2,130,000 | 2.1% |
| Directors and Officers as a Group | 33,579,755 | 33.3% |
(1) Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding on September 22, 2023. As of September 22, 2023, there were 100,974,373 shares of our company's common stock issued and outstanding.
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(2) Rich Resources Inc. is a Canadian corporation owned 51% by Luke Rich and 49% by Bruce Costerd.
Changes in Control
We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Except as disclosed herein, there have been no transactions or proposed transactions in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last three completed fiscal years in which any of our directors, executive officers or beneficial holders of more than 5% of the outstanding shares of our common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.
Director Independence
We currently act with five directors, Bruce Costerd, Richard Haderer, Luke Rich, Slade Dyer and Don Bowins. We have determined that Slade Dyer and Don Bowins qualify as an "independent director" as defined in NASDAQ Marketplace Rule 4200(a)(15).
We do not have a standing compensation or nominating committee, but our entire board of directors act in such capacity. We believe that our directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.
Item 14. Principal Accountants Fees and Services
The aggregate fees billed for the most recently completed fiscal years ended May 31, 2023 and 2022 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:
| Year Ended May 31 |
||
| 2023 ($) |
2022 ($) |
|
| Audit Fees | $30,000 | $27,700 |
| Audit Related Fees | Nil | Nil |
| Tax Fees | Nil | Nil |
| All Other Fees | Nil | Nil |
| Total |
$30,000 |
$27,700 |
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Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.
Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors' independence.
PART IV
Item 15. Exhibits, Financial Statement Schedules
Exhibits required by Item 601 of Regulation S-K
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35
| (32) | Section 1350 Certifications |
| 32.1* | Certification of Principal Financial Officer Pursuant to Section 906 Certifications under Sarbanes-Oxley Act of 2002 |
| 32.2* | Certification of Principal Financial Officer Pursuant to Section 906 Certifications under Sarbanes-Oxley Act of 2002 |
| INLINE XBRL | |
| 101.INS* | Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
| WOLVERINE RESOURCES CORP. | |
| (Registrant) | |
| Dated: January 18, 2024 | /s/ Bruce Costerd |
| Bruce Costerd | |
| President, Chief Executive Officer, Chairman and Director |
|
| (Principal Executive Officer) | |
|
Dated: January 18, 2024 |
/s/ Richard Haderer |
| Richard Haderer | |
| Chief Financial Officer and Director | |
| (Principal Financial Officer and Principal Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| WOLVERINE RESOURCES CORP. | |
| (Registrant) | |
|
Dated: January 18, 2024 |
/s/ Bruce Costerd |
| Bruce Costerd | |
| President, Chief Executive Officer, Chairman and Director | |
| (Principal Executive Officer) | |
|
Dated: January 18, 2024 |
/s/ Richard Haderer |
| Richard Haderer | |
| Chief Financial Officer and Director | |
| (Principal Financial Officer and Principal Accounting Officer) | |
|
Dated: January 18, 2024 |
/s/ Luke Rich |
| Luke Rich Director |
|
|
Dated: January 18, 2024 |
/s/ Slade Dyer Slade Dyer Director |
|
Dated: January 18, 2024 |
/s/ Don Bowins Don Bowins Director |
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